#EOCCHS 2020 - 2021 - Charleston Metro Chamber of Commerce
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2020 - 2021
#EOCCHS
Table of Contents Introduction 1 Population Growth 1 Forecast Summary 2 2020 Economic Forecast at a Glance 3 Employment AND Labor Force 4 Residential Construction 4 Residential Sales 6 Retail Sales 6 Transportation (Port) 8 Transportation (Airport) 8 Visitor Industry 10 Attraction Attendance 10 Economic Outlook Board 12 Methodology 13
Introduction
Population
Growth
The annual economic forecast for the
Charleston region is a partnership project
between the Charleston Metro Chamber of
Commerce’s Center for Business Research
and the College of Charleston’s Office of
Economic Analysis.
The forecast is based upon historical data
tracked and collected by the Chamber’s
Center for Business Research. Data on
each of the key economic indicators that
drive the region’s economy are collected
and provided to the College of Charleston
School of Business. An econometric
forecasting model is used to develop a
projection for each indicator. The model
also takes into account national indicators.
The key to the success of the forecasting 34
project has been the Economic Outlook
Board, comprised of local business leaders
from every major economic sector. Their The region is expanding by 34 new residents
collective insight provides information each day, of which 26 are people moving here
that may not be picked up in a statistical and eight are net new births. As of 2018, the
analysis of the data. The Board often Charleston Metro Area population is 787,643.
has information on future developments
that no statistical model would capture. 2019 estimates due to be released
Furthermore, the data is often reported in March 2020; U.S. Census Bureau.
a lag - the Economic Outlook Board
reviews the statistical forecast and adds the
“real-time, real-knowledge” insight into the
actual performance of the local economy.
The 2020 Forecast marks the 29th
Annual Conference and Forecast.
1
Forecast Summary
Economically, 2019 was another vigorous Final retail sales figures for 2019 were not
year for the Charleston Metro Area. The yet reported at the time this forecast was
region was named a “Small Powerhouse” prepared, but estimates put the Metro Area’s
by McKinsey Global Institute in its Future of total at about the same as in 2018, near $30
Work in America study in 2019. According to billion. Area accommodations sold 4.8 million
the report, Small Powerhouse communities room nights in 2019, a 3.7% increase, while
are smaller than the largest U.S. metros like continuing to add room inventory. Average
New York, Los Angeles and Miami, but are the occupancy rates remained high at an average
fastest-growing in terms of GDP, population of 74.5% for 2019, and attendance at area
and jobs. Charleston also received top marks museums, gardens and similar attractions
from Forbes, ranking it in the top five metros increased 1.3% compared to 2018.
of “where the jobs will be in 2020”.
Charleston International Airport (CHS) had
The region’s labor force and job growth another record-breaking year, with more than
accelerated in 2019 compared to 2018, 4.8 million passengers handled, 9% more than
slightly more than forecasted. The workforce in 2018. Airlines continued to add new flights,
grew by 2.3% (9,000 workers) and employment including British Airways, which brought
grew by 2.8% (10,000 new jobs). In addition, CHS its first nonstop transatlantic flight,
30 new and expanding firms in the region connecting the Charleston region to London’s
announced $260 million in capital investment Heathrow. Capital expansion continues to add
and 2,100 new jobs that will be added to the parking and passenger capacity at the newly
market over the next several years. These renovated facilities. The South Carolina Ports
jobs span numerous fields from logistics Authority reported more activity than expected
to machined components manufacturing, in 2019, an increase of 5.2% over 2018. Their
from IT and robotics to customer service, newest economic impact study was released,
headquarters and more. Our region’s overall showing a $63.4 billion annual impact on the
labor force participation rate remained at state’s economy. Locally, the impact is nearly
65.5%, higher than the U.S. average of 63%. $8 billion, with almost 28,000 Lowcountry jobs
sustained because of port operations.
Single-family home construction permits
issued were essentially the same in 2019 as in Military remains a top economic driver in our
2018, about 4,800 units. Multi-family permits, region with a $10.8 billion dollar annual impact.
while still strong in our market, dropped below That will continue to strengthen as Charleston
2,000 units for the first time since 2015, which becomes one of the Coast Guard’s largest
left total residential permits down slightly in bases in the nation over the next several years.
2019. The number of homes sold in 2019
outpaced expectations, with more than 18,500 The Charleston region is thriving and the 2020-
closings or 2.1% growth over 2018. The median 2021 forecast indicates continued economic
sales price was $277,500 and the average was expansion. While our economy is strong and
$365,989, up 4.2% and 1.6%, respectively. diverse, we must continue aligning talent
This robust activity level, coupled with fewer skillsets with our growing jobs and ensuring
new residential construction permits issued, housing options are affordable for all residents.
resulted in much lower inventory (-17%) or
about three months’ supply at year end.
2
2020 Economic Forecast at a Glance
+2.0%
% +2.5%
% +0.3%
%
Labor Force Employment ATTRACTIONS
+1.0%
% +1.9%
% +0.5%
%
RESIDENTIAL UNITS Retail Single Family
SOLD SALES Permits
+4.3%
% +8.0%
% -1.0%
%
TEUs Airport REVPAR
EMPLOYMENT AND LABOR FORCE
The Charleston region’s labor force and job growth accelerated in 2019 compared to 2018, slightly
more than our forecast. Residents participating in the labor force grew by about 9,000 and those
employed grew by about 10,000, leaving the unemployment rate averaging 2.5% in 2019, a record
annual low. Our region’s overall labor force participation rate has remained at about 65.5% for the
past few years, higher than the U.S. average of 63% over the same time period.
Whether ranked by growth in number or by percentage, the three sectors with the most job growth in
the region in 2019 include construction (+4%), trade, transportation and utilities (+3.6%) and leisure
and hospitality (+3.4%).
The forecast is for the local labor force to grow by 2% again in 2020, as employment grows at 2.5%,
leaving the unemployment rate hovering around 2% on average for the year. In 2021, roughly this
same pace is expected, and the labor force living inside the three county region will surpass 400,000
for the first time.
ReSIDENTIAL CONSTRUCTION
Single-family home construction permits in the Charleston Metro Area were essentially the same
in 2019 as in 2018 and didn’t slow down as much as predicted. Multi-family permits dropped below
2,000 units for the first time since 2015, which left total residential permits down slightly (-3.5%) in
2019 compared to 2018.
Residential building permits issued statewide also decreased (-1.5%) in 2019 compared to 2018.
Nationally, single-family units permitted were flat in 2019, while multi-family units permitted were up
double digits, leaving overall residential construction permits up by 3.9% compared to the prior year.
The forecast for 2020 and 2021 is for single-family homes permitted in the Charleston Metro Area
to edge up by just under 1% each year, while multi-family units permitted remain robust but not
at the pace of the past several years. This will allow demand to catch up to the recent increase in
supply of multi-family properties in the region.
4
Labor Force / Employment Charleston Region
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
-
2015 2016 2017 2018 2019 2020 (f) 2021 (f)
Labor Force Source: U.S. Bureau of Labor Statistics
Employment (f) forecast
Total Residential Permits
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
-
2015 2016 2017 2018 2019 2020 (f) 2021 (f)
Single-family Units Source: U.S. Bureau of the Census
Multi-family Units (f) forecast
ReSIDENTIAL Sales
Homes sold in the Charleston Metro Area in 2019 outpaced expectations, with 2.1% growth over
2018. Nationwide, the overall strength of the economy, record low unemployment and record high
stock markets improved the asset bases of millions of Americans. These factors, coupled with low
mortgage rates and the attractive quality of life of the Charleston region, helped the local housing
market perform better than expected.
In December 2019, the Charleston Metro Area was named one of the “Top Ten Outperforming Metro
Markets for the Next 3-5 Years” by the National Association of Realtors. This accolade was based on
numerous factors, including migration patterns, job growth relative to the national average, home price
appreciation and other variables.
The forecast for 2020 and 2021 is for local home sales to increase by 1% and 1.5%, respectively, and
for continued demand to elevate the median sales price above $280,000 and the average above $370,000.
Retail Sales
Retail sales for the full calendar year of 2019 were not yet reported at the time this forecast was
prepared, but estimates put the Metro Area’s total at about the same as in 2018, around $30 billion.
Due to some notable increases in the last quarter of 2018 in Berkeley County, likely related to some
large non-manufacturing capital investments similar to some in 2016, and therefore not necessarily
annually recurring, preliminary 2019 sales in the region show a slight decrease compared to 2018.
Still, all three counties have seen robust retail activity in the past several years, and total regional
sales are almost double what they were a decade ago during the middle of the Great Recession.
Despite the retail industry’s struggle globally to adapt to changing consumer behavior and technology,
the Charleston area’s population growth and economic strength have helped its retail sector succeed
during this evolution. According to local retail market analysts’ reports, the Charleston Metro Area added
approximately 900,000 square feet of retail space in 2019, and yet the vacancy rate remained low at 4.8%.
With more than 300,000 square feet of retail space under construction in the fourth quarter of 2019,
the forecast for the region’s total retail sales in 2020 and 2021 is for more typical increases of about
2% to 2.5% annually.
6
Residential Home Sales
Year # Sold Average Sales Price Median Sales Price
2015 16,221 $307,415 $229,000
2016 17,829 $320,677 $240,000
2017 18,411 $340,186 $251,500
2018 18,193 $360,072 $266,263
2019 18,576 $365,989 $277,500
2020 (f) 18,762 $373,309 $280,275
2021 (f) 19,043 $375,175 $284,479
Source: Charleston Trident Association of Realtors
(f) forecast
Gross Retail Sales ($000)
40,000,000
35,000,000
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
-
2015 2016 2017 2018 2019 2020 (f) 2021 (f)
Gross Retail Sales Source: S.C. Department of Revenue
(f) forecastTransportation (Port)
The South Carolina Ports Authority reported higher activity than expected in 2019, with more than
2.4 million TEUs handled, an increase of 5.2% over 2018. Assembled vehicles handled through the
port topped 225,000, up 4.4%, and breakbulk tonnage was also up 9.6% in calendar year 2019.
The South Carolina Ports Authority’s newest economic impact study shows a $63.4 billion annual
impact on the state’s economy. Current improvements to this mighty statewide asset include the
harbor deepening and the new Hugh K. Leatherman, Sr. Terminal, the only permitted new container
terminal on the U.S. East and Gulf Coasts. The Charleston harbor deepening project is on track
to achieve a 52-foot depth in 2021, making Charleston the deepest harbor on the East Coast.
The entrance channel is also being deepened to 54 feet, up from 47 feet. The new Leatherman
Terminal’s first phase is also on track to open in 2021, and at full build-out, the 280-acre terminal is
expected to boost capacity by a full 50%.
As one of the top ten ports in the United States, Charleston continues to demonstrate its vital
connection and prominent position on the world stage. The Port’s forecast for 2020 is for an
increase of 4.3% in TEU activity compared to 2019, and 2021 will bring another 3.3% increase.
Transportation (Airport)
Charleston International Airport’s (CHS) forecast for 2019 was right on target with 4.8 million
passengers handled, 9% more than in 2018.
The region’s new British Airways flight, direct from CHS to London’s Heathrow Airport on a
seasonal basis, is the first nonstop transatlantic flight for Charleston International. Reports are that
its inaugural year was a success and plans are to return in 2020. Additional new flights added in
2019 by nearly every airline serving CHS bring the number of flights arriving and departing daily
to about 180. More flights scheduled to be added in 2020 have also been announced by Allegiant,
Southwest and Alaska Airlines.
The forecast for 2020 and 2021 is for increased passenger volumes of about 8% each year and to
surpass the five-million-passenger mark for the first time in 2020.
8Port of Charleston Activity (TEUs)
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
-
2015 2016 2017 2018 2019 2020 (f) 2021 (f)
TEUs Source: S.C. Ports Authority (f) forecast
*TEUs: twenty-foot equivalent units
Charleston International Airport Passenger Activity
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
-
2015 2016 2017 2018 2019 2020 (f) 2021 (f)
Source: Charleston County Aviation Authority (f) forecast
Enplanements + Deplanements *includes civilian and military passengersVisitor Industry
In 2019, readers of Travel + Leisure magazine voted Charleston the number one U.S. city to visit for the
seventh year in a row, as well as naming it among the world’s top 15 destinations. Area accommodations
sold 4.8 million room nights in 2019, a 3.7% increase in demand from the previous year, even while
continuing to add room inventory. There were 850 more local hotel rooms available during any month
in 2019, on average, than in 2018 and a total inventory of 18,162 rooms as of December 2019. As
expected, more hotel rooms added to competition, putting some downward pressure on RevPAR
(revenue per available room) by 1.9% for 2019.
Hurricane Dorian, while not a direct hit in Charleston, affected visitor activity in all Southeast Atlantic
destinations in September, but the local industry quickly rebounded. Occupancy rates remained high at
an average of 74.5% for 2019, down only 0.4% compared to 2018, and ADR (the average daily rate or
the price paid for those rooms that were sold) decreased only 0.3% to $148.46.
At least 500 new rooms are expected to be added in 2020, and area professionals tout increasing
demand, in particular, for properties with meeting space. These new rooms are expected to keep
pressure on RevPAR to the tune of about 1% per year in 2020 and 2021, but the area’s seven million
visitors and 40,000+ hospitality professionals can expect another robust couple of years.
Attraction Attendance
Admissions tracked within this indicator include approximately 20 area historic homes, museums,
gardens and other attractions. Though the region boasts numerous new sites to see and things to do
each year, this set of attraction data has remained constant for decades, allowing for apples-to-apples
tracking annually.
New attractions in the local area draw more first-time visitors to the region, increasing attendance at
other area attractions including those in this subset. This, coupled with increased access via additional
flights at Charleston International Airport, plus more room nights sold at area hotels, contributes to the
boost in attraction attendance by 1.3% seen in 2019. One of the Charleston area’s newest historical
site broke ground in October 2019, the International African American Museum - a twenty-year project
in the making. The museum aims to tell the story of the journey of enslaved Africans brought to
America hundreds of years ago, half of whom arrived through a single port, Charleston.
The area’s continued popularity as both a business and leisure visitor destination prompt a forecast of
increased attraction attendance for both 2020 and 2021.
10RevPAR (Revenue Per Available Room)
$120.00
$110.00
$100.00
$90.00
$80.00
-
2015 2016 2017 2018 2019 2020 (f) 2021 (f)
RevPAR Source: Office of Tourism Analysis, College of Charleston
(f) forecast
Attendance at Area Attractions
Year Attendance % Change From Previous Year
2015 2,447,565 0.5%
2016 2,571,589 5.1%
2017 2,627,933 2.2%
2018 2,503,469 -4.7%
2019 2,537,115 1.3%
2020 (f) 2,545,201 0.3%
2021 (f) 2,552,445 0.3%
Attractions include: Historic homes, museums, gardens and other attractions.
Source: Charleston Area Convention & Visitors Bureau/Explore Charleston (f) forecastEconomic Outlook Board
Mamie Bush Harry Gregorie Mary Beth Richardson
Hilton Garden Inn – GDC South Carolina
Charleston Waterfront Ports Authority
Katie Henderson
Willis Cantey Dunhill Staffing Wil Riley
Cantey Tech Systems Charleston Trident
Consulting Association of Realtors
Wilbur Johnson
Charlie Carmody Young Clement Steve Slifer
CBRE Rivers LLP NumberNomics
Paul Connerty Barry Jurs David Stasiukaitis
KC Associates, LLC Berkeley County Low Country Case
Economic Development & Millwork Inc.
Dan Doyle
The Beach Company Danny Kassis John Truluck
Dominion Energy Dorchester County
Steve Dykes Economic Development
Charleston County Perrin Lawson
Economic Development Explore Charleston Steve Warner
Charleston Regional
Joe Grech Hernan Peña Development Alliance
South Carolina Charleston County
Federal Credit Union Aviation Authority
College of Charleston
School of Business School of Professional Studies
Frank Hefner, Ph.D. Godfrey Gibbison, Ph.D., Dean
Alan Shao, Ph.D., Dean
Mark Witte, Ph.D.
Center for Business Research,
Charleston Metro Chamber of Commerce
Jacki Renegar, CERPMethodology
Data for the forecast is collected by the
Charleston Metro Chamber of Commerce’s
Center for Business Research and reviewed
by the College of Charleston. Data reported
by national and state agencies, such as
employment, inflation and interest rates, are
downloaded directly from those agencies.
The statistical methodology used to
generate the forecast herein is Vector
Autoregression or VAR.
For a digital copy of the forecast, please visit:
www.charlestonchamber.org/
economicforecast
Center for Business Research
Charleston Metro Chamber of Commerce
4500 Leeds Ave., Suite 100
North Charleston, SC 29405
843.577.2510
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